Henry review reforms must be revisited – Warburton

Government adviser and business veteran
Dick Warburton
says the economic credentials of Labor and the Coalition should be judged on their willingness to pursue serious tax reform.

As the business community awaits the outcome of the election and its impact on key policy areas including tax, broadband, infrastructure, climate change and superannuation, Mr Warburton said it was vital the Henry tax review was revisited.

The government’s Board of Taxation chairman and former Reserve Bank board member, Mr Warburton, said whoever formed government needed to get serious about tax reform.

“The big one I and the business community is interested in is the Henry review on tax reform," said Mr Warburton, a former chairman of David Jones and Caltex Australia.

“The Coalition has indicated a stronger review of that than the Labor Party, although both have been a bit airy fairy on it."

Opposition Leader Tony Abbott has flagged interest in Treasury secretary
Ken Henry
’s proposal to reduce and flatten personal income tax rates. He has also promised a 1.5 per cent levy on big companies to fund the $8.8 billion paid parental leave scheme, while simultaneously reducing the headline company tax rate to 28.5 per cent.

Labor also wants to trim the corporate rate to 29 per cent, give small businesses an immediate tax write-off for purchases up to $5000, introduce a 50 per cent tax discount on bank interest and phase out interest withholding tax for banks.

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With both sides lacking a majority in the House of Representatives and Senate, pushing through tax and other economic policy will be more difficult.

Asciano
chief executive
Mark Rowsthorn
said the incoming government’s priorities should be picking up reforms in the Henry tax review that have been largely overlooked and a commitment to productive infrastructure investment, such as the coal chain rail and ports in NSW and Queensland.

He said the tax breaks for infrastructure bonds promised by the Coalition were a useful start.